Australian Property

Viewing posts in the Australian Property category

Rents set to tumble in Sydney, Melbourne ghost cities

ScreenHunter_06 May. 06 09.27 By Leith van Onselen The AFR has produced a detailed report on the apartment glut hitting Australia's major capitals, whereby recent purchasers are finding it increasingly difficult to secure tenants and are having to either drop their asking rents or offer so-called New York-styled incentives, such as providing the first month free. The oversupply situation is reportedly worst in Melbourne: Central Melbourne has over 17,000 new apartments in the pipeline and 5260 are under ­consideration for development approval... “There’s chronic oversupply,” say Margaret Lomas, a founder of...
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Market analysts warn on property rents

ScreenHunter_07 Jul. 17 21.09 By Leith van Onselen From The AFR comes another story warning that the slowing rental market could soon place pressure on house prices: A softening residential rental market will drive yields down further and could be the canary in the coal mine of a coming correction in property prices, analysts say. Latest figures from Fairfax-owned Australian Property Monitors show gross yields fell in Perth and Canberra as rents tumbled. Yields have also fallen in Sydney, Melbourne and Brisbane... Housing analysts SQM Research and BIS Shrapnel expect rents and rental yields to continue to soften...
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Joye warns again on housing bubble

url Australia's only MSM voice of reason on the bubble (yes, peeps) Chris Joye today slams the RBA for its runaway housing bubble that has re-ignited after an Autumn slumber: ...The RBA says we should not get exercised about stonking house price appreciation because Australia’s housing credit growth rate is modest. In his July speech Stevens said “the growth of credit outstanding for housing is about 6 to 7 per cent per annum, or slightly above trend nominal income growth”. “It’s hard to mount the soap box to complain about that pace,” he averred. Really? Credit growth is only...
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Say hello to generation rent (members)

ScreenHunter_01 Jan. 27 23.41 By Leith van Onselen The Age's Clay Lucas has written a good article today summarising an upcoming report from the Tenants Union showing the strong shift towards renting by Victorian families since the early-1980s: ...families now rent 42 per cent of the state's privately leased homes. Experts say the change is the consequence of the massive spike in home prices since 1997, and argue Victoria needs to dramatically change its laws around renting to give more power to tenants and make it harder for landlords to evict long-term renters. ...the research shows renting for a decade or more has...
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Mortgage lending choking-off business lending (members)

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen Industry Super Australia has lodged a submission to the Murray financial system inquiry claiming that the banks' bias towards housing lending is crowding-out lending to productive businesses, reflecting an unproductive use of capital. From The AFR: The economy is being held back by banks favouring home loans over lending to productive businesses, industry super funds say... “Consistent analysis demonstrates that we have a systematic issue ­transitioning national savings to real productive capital, such as nation-building infrastructure,” chief ­executive David...
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Stockland: House price growth “unsustainable”

ScreenHunter_19 Jun. 06 13.57 By Leith van Onselen Stockland's chief, Mark Steinert, delivered a warning yesterday that the double-digit house price growth experienced over the past two years is unsustainable, and expects growth to slow to just 1%. From The Canberra Times: Booming double-digit house price growth could screech to a halt, according to Stockland, one of the country’s biggest residential developers, which is now forecasting rates of growth closer to 1 per cent. ...while population growth and undersupply would underpin demand, he expected that the pace of growth in prices would slow, allowing the...
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SQM: Rental market has stalled

ScreenHunter_07 Jul. 17 21.09 By Leith van Onselen SQM Research has released its rental market report for July, which revealed a slight drop in the number of vacancies but a stable rental vacancy rate of 2.3% (see below table). According to SQM: Each capital city continues to tell its own unique story, with Perth and Darwin’s vacancies soaring since this month in 2013, and Hobart’s dropping substantially over the same period. Sydney has remained steady, revealing no yearly change and similarly, Melbourne has recorded a vacancy rate of 2.6% - identical to its July 2013 vacancy rate. SQM has also released its...
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Delayed supply response to worsen Perth property crunch

ScreenHunter_3819 Aug. 18 14.48 By Leith van Onselen Another day, another article on why Perth housing appears to be hitting the skids. From The AFR: Perth is at risk of being awash with vacant offices and apartments as early as next year, as the end of boom time conditions hits the inner city market. The forecast increase in vacancy rates in the commercial and residential sectors is linked to the impending deluge of new premises commissioned during stronger economic times. Property Council of Australia Executive Director Joe Lenzo said an already above average office vacancy rate of 11.8 per cent in the city could...
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More warnings on SMSF property leverage

ScreenHunter_30 Oct. 10 06.15 By Leith van Onselen Jeremy Cooper, chairman of Challenger's retirement income area and former deputy chairman of the Australian Securities and Investments Commission, has warned that self-managed superannuation funds (SMSFs) are accumulating too much property debt, which poses a major risk to Australia's financial system. From The AFR: “There’s enough leverage in society anyway...We leverage up our homes, the minute you buy a share you’re building leverage, there’s a lot of personal debt around and we’re seeing people going into retirement with more debt.” Mr Cooper... said he...
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Insiders does negative gearing

ScreenHunter_3813 Aug. 18 09.23 Find above an interesting discussion on ABC's Insiders program yesterday in which the topic of negative gearing and tax concessions more broadly were discussed in the context of Budget fairness. On the one side, there is Lenore Taylor and David Marr arguing that the exclusion of tax lurks like negative gearing and superannuation from cuts, while targeting more vulnerable households, has fundamentally eroded the equity of the Budget. On the other is Gerard Henderson, who argues that the wealthy pay too much tax and that abolishing negative gearing in the mid-to-late 1980s was...
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RP Data weekend property market update (members)

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 17 August 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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Melbourne pushes auction clearances up

ScreenHunter_19 Mar. 13 13.12 By Leith van Onselen The national auction clearance rate rose sharply over the weekend on the back of increases in Sydney, Melbourne and Brisbane. According to RP Data, the national weighted average preliminary auction clearance rate was 68.4% over the weekend, which was up 2.5% from the 65.9% preliminary clearance rate reported last weekend. Sydney’s clearance rate rose by 1.2% to 76.7%, whereas Melbourne’s rose to 67.7% (last weekend 63.9%). Brisbane, which typically only has a small number of auctions, experienced a strong increase in its clearance rate to 50.0% from 35.3% the weekend...
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Should we tax the inner suburbs?

ScreenHunter_3806 Aug. 15 11.44 By Leith van Onselen Jago Dodson, Professor of Urban Policy at at RMIT University, has called on the Victorian Government to tax inner city residents so that infrastructure and amenities can be expanded in outer areas. From The Age: The lack of access to services and jobs for people living in the outer suburbs contrasts with that found by those in the established inner areas... Now may be the time to redress that by taxing inner suburban residents and businesses who reap the liveability rewards of decades of state services investment, to enable similar government investment in services for...
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Busting the REIA’s negative gearing lies once and for all

ScreenHunter_43 Jan. 24 08.38 By Leith van Onselen Repeat a lie often enough and it becomes true. This appears to be the approach taken by the Real Estate Institute of Australia (REIA), which has issued yet another warning that the removal of negative gearing would adversely harm Australia's renters by creating rental shortages and driving-up rents. From Residential Property Manager: REIA chief executive Amanda Lynch said the federal Treasury is again pushing for the removal of negative gearing and the rumour is that modelling will be done on retaining it for new housing only. “This is a serious threat not only for our...
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Chinese property demand to the moon!

1408050204943.jpg-620x349 From the Sydney Morning Domain today: Around 10 million of the wealthiest Chinese families, or around one in seven, are interested in migrating to Australia, according to a survey conducted by the broker [CLSA]. And home ownership in a desirable destination country is “a key reason” for the flood of money coming into the Sydney and Melbourne property markets, conclude the broker’s analysts. Not all of those 10 million households will have the financial wherewithal to ultimately act on their desire to relocate Down Under, but it is representative of a powerful trend. China is...
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Weekly RP Data Australian house price update (members)

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 14 August 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.57% (see next chart). Growth in this week's home values was broad-based, but strongest in Sydney, Melbourne and Adelaide (see next chart). So far this month, home values have risen by 0.60%, with gains across the board but strongest growth in Sydney (see next chart): Values are up by 5.60% so far in 2014, with all major capitals except for Perth experiencing growth, and particularly strong gains recorded in...
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Ruddprime struggles

First-Time-Buyers-NSW Cross-posted from Martin North's DFA blog: As part of our household surveys we have been examining the state of play for NSW first time buyers since 2002. In our research we have identified the year in which they purchased, whether they subsequently refinanced, or moved on, and how many of these households are currently having difficulty in finding a lender to refinance with. To be clear, this is a snapshot, as at August 2014, across multiple cohorts. The data shows, firstly the monthly volume of loans written for first time buyers, peaking in 2009, and now languishing at a 20 year low. Next we...
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More evidence Perth property is hitting the skids (members)

ScreenHunter_01 Feb. 17 18.55 By Leith van Onselen Another report has emerged today suggesting that Perth's housing market is at the precipice, with a nascent apartment glut developing. From The AFR: Perth faces an apartment glut from a cooling economy and slow population growth that are likely to leave the city with too many rooms. Property analysts expect the former boom town, which has previously experienced housing shortages, to have an over-supply of apartments as early as next year following the completion of a record number of developments... Concerns about a nascent apartment glut are confirmed by ABS data,...
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Popping CBA’s ‘no bubble’ bubble

imgres Poor old CBA just can't leave this scab alone. Then again, given everyone outside of Australia, including many that fund the CBA, knows very well that the Australian housing bubble is very real, perhaps it has no choice. From the AFR: Commonwealth Bank of Australia, the nation’s largest home loan provider, has dismissed suggestions of a housing bubble, claiming recent investor interest in housing was “a rational response to the low interest rate environment created by the central banks”. The bank laid out five points as to why the housing market was not in bubble territory in its presentation...
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The property cycle has turned (members)

ScreenHunter_3730 Aug. 13 07.09 By Leith van Onselen Yesterday's house price release from the ABS, along with the latest housing finance data, has provided an early indication that the housing bull market that has been in effect for the past two years might be nearing its end. Arguably the single best short-term indicator for house price growth - real housing finance commitments - has begun to turn down which, given past strong correlations, suggests that real price growth nationally will continue to slow throughout the remainder of this year and into next year, with the possibility of price falls thereafter (see next...
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Perth property edges off mining cliff

ScreenHunter_37 May. 14 23.23 By Leith van Onselen Recent releases from the ABS have provided early evidence supporting my prediction that Perth housing is at the precipice, as explained in detail in last month's member's report. Today's house price release from the ABS revealed that Perth house prices declined by 0.3% in the June quarter, with annual price growth slowing sharply to just 3.6%. Meanwhile, the June quarter CPI release, released late last month, showed Perth rental growth slowing to just 0.5% over the quarter, with annual growth falling to a below-inflation 2.9%. The below chart, which plots the annual...
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ABS house price gains ease

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen The ABS has today released its property price index – incorporating both detached houses and units – which registered a 1.8% rise in values nationally over the June quarter and a 10.1% gain over the year, down from the 10.9% annual growth recorded in the year to March 2014. As expected, the growth in property values was once again driven by Sydney – investor central – where prices rose by 3.1% over the quarter and by 15.6% over the year. Solid gains were also posted in Melbourne (+9.3% YoY), Brisbane (+6.8% YoY), Adelaide (+5.6% YoY), Hobart (+4.3% YoY), Perth...
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Do the Liberals know what liberal is?

unnamed Andrew Bolt today crucifies the Coalition for failing to be Liberal: TELL me how Liberal the Abbott Government really is. Or, if you’re the Prime Minister, tell the deflated party members. After all, this Liberal Government last week dropped its plans to restore free speech, frightened off by the Muslim lobby. ...This Liberal Government has also promised to change the Constitution to divide Australians by race. It still endorses the fiction that man-made global warming threatens the world and that spending another $2.5 billion can help stop it. It still promises a huge new welfare program — a...
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Sydney property rocket exits solar system (members)

NF-104 By Leith van Onselen The speculator frenzy that has engulfed Sydney’s housing market continues to reach absurd proportions, with today’s Lending Finance data for June, released by the ABS, once again smashing all records, with both the value and proportion of mortgages going to New South Wales investors surging to another all time high. As shown below, the value of investor loans in New South Wales (read Sydney) continues to rocket, with Melbourne – the second hottest market – also experiencing strong growth: According to the ABS, investor finance commitments in New South Wales...
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RP Data weekend property market update (members)

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 3 August 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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